9.6.5 Interim orders and directions
9.6.5.1 Interim applications
In the run-up to trial, there can be various interim applications made by the parties. Some such applications are case management hearings, or akin to case management hearings, and involve sorting out aspects of the management of proceedings and the directions to trial that the parties cannot agree on between themselves. Other such applications, of which there are many, arise where a party seeks, for example:
- to strike out a particular part of the opposing party’s case on the basis that it cannot succeed on its face in any event (the wording of the CPR being that it discloses no reasonable grounds for bringing or defending the claim);118
- summary judgment on the basis that the opposing party has no real prospect of succeeding on the claim (claimant) or successfully defending the claim (defendant);119
- interim injunctive relief;
- security for costs (discussed further below in Section 9.6.5.3.2);
- for a preliminary point to be decided that will either dispose of the claim or make the proceedings significantly shorter and more efficient;
- an order requiring the defendant to disclose a specific category of documents;
- an order requiring the defendant to provide samples of an allegedly infringing product;
- an order freezing the defendant’s assets (in a case where there is evidence that persuades the court that it is likely that they will be dissipated);
- an order requiring the defendant to allow the claimant’s representatives access to property for the purpose of searching for and seizing specified items or documents – an Anton Piller order – (in a case where there is evidence that persuades the court that otherwise the defendant will be likely to hide or destroy those materials).
The most common and often commercially significant interim relief sought in patent proceedings is an interim injunction (sometimes called a preliminary injunction).
The principles governing applications for interim injunctions derive from the case of American Cyanamid Co. v. Ethicon Ltd [1975] AC 396 and are, in summary, whether there is a serious question to be tried, whether damages are an adequate remedy (first to the claimant if relief is refused, and then to the defendant if relief is granted), whether either party would suffer irreparable and/or unquantifiable harm should the injunction be or not be granted and whether there are any special factors specific to the particular case in favour one way or the other.
In patents cases, it is often the case that the patentee can be compensated in damages for any infringement that occurs up until trial and therefore, an interim injunction is not normally granted (nor indeed applied for). The most common exception to this is where generic pharmaceutical products are or are at risk of coming onto the market, which will result in rapid price depression such that the patentee will never be able to recover its original price levels for the patented reference product if it is successful at trial. Even then, the court must be satisfied that the facts of the case, as borne out in the evidence, establish that damages are not an adequate remedy for the patentee.120
The party in whose favor an interim injunction is granted pending trial will typically be required to provide a cross undertaking in damages to the court to the effect that, if it turns out the injunction is wrongly granted (in the sense that that party is unsuccessful at trial), then they will compensate the allegedly infringing party in damages for loss suffered by reason of the injunction.
9.6.5.2 Dividing a large case into multiple trials
If a dispute involves a number of patents, the court may divide the case into a series of distinct trials so that the liability issues relating to one patent (or a related family of patents) are addressed at one trial, and then one or more further separate trials are scheduled to deal with further patents. In telecommunications and FRAND (fair, reasonable and nondiscriminatory) license cases, the court may also schedule a distinct FRAND trial to take place, commonly after one or more of the earlier trials. In this case, those earlier trials are called “technical trials” because they deal with the technology issues relating to the patent, as opposed to the FRAND trial, which deals with licensing and potentially with competition issues.
9.6.5.3 Issues relating to costs
As discussed further below in Section 9.7.4, costs are generally awarded in patents cases against the losing party. Costs cover legal expenses incurred by the party, which include the fees charged by the legal representatives, those by experts and any court fees. As such, costs are an integral part of court procedure and are a weapon in the court’s armory that it can use both to encourage parties to behave reasonably and effectively, to encourage settlement out of court, and not to waste the court’s time and resources.
9.6.5.3.1 Costs budgeting
If, on the claim form, the claimant does not declare that their claim is worth more than GBP 10 million, then the parties both have to perform a costs budgeting exercise, governed by Part 3 of the CPR.121 Claims declared to be worth more than GBP 10 million, as many patents cases are, are exempt.122
Costs budgeting requires the parties to fill out a form known as “Precedent H,” in which they set out how much they consider each stage of the proceedings will cost by reference to the hourly rates and time to be spent by the various members of the legal (solicitor or patent attorney) team, the costs of barristers instructed, the costs of experts to be instructed and other allowable disbursements. These Precedent H budgets then must either be agreed upon between the parties or approved at a hearing before the court. For each individual stage of the proceedings, the sum specified in the Precedent H for that party is the maximum level of costs recoverable from the other side by the winning party. Once agreed upon or approved, the Precedent H form can only be amended by application to the court on the basis of a significant change in circumstances.
9.6.5.3.2 Security for costs
If the claimant is impecunious or does not have any significant assets in the United Kingdom, the defendant can seek security for costs – namely, an order requiring that the claimant pay a sum upfront as security for the defendant’s litigation costs.123 Such security can be given either by payment of the full sum of security into court, or by banker’s bond or banker’s guarantee. If the parties cannot agree that security for costs should be given by the claimant or agree upon the amount of security that should be provided, the defendant can make an application to the court for a determination. When making such an application, the defendant will often rely on its Precedent H as setting out its anticipated costs of the proceedings.
9.6.5.3.3 Costs for interim hearings
For interim hearings, especially for those of half a day or less, the court will make a summary assessment of the costs to be paid for that hearing by the party who lost the application. This summary assessment is made based on a schedule of costs for that hearing produced by the relevant party that summarizes the costs expended on the application and on the hearing itself. The court will make the summary assessment immediately after the court has told the parties of its decision.
Except in exceptional circumstances, each party bears its own costs of a case management hearing.